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Review and Prospect of China’s TMT IPO in the second half of 2020 From PWC

The following is the Review and Prospect of China’s TMT IPO in the second half of 2020 From PWC recommended by recordtrend.com. And this article belongs to the classification: Venture capital, PWC, research report.

In the second half of 2020, the number of IPOs of mainland TMT enterprises increased significantly, with a total of 109 IPOs, and the total amount of financing jumped to about RMB 249.6 billion. In 2020, the number of mainland TMT IPOs totaled 164, an increase of nearly 58% over the whole year of 2019, and the total amount of financing was about 346.8 billion yuan, which was nearly doubled over the whole year of 2019.

Among them, in the second half of 2020, the IPO of mainland TMT enterprises with the largest amount of financing are SMIC International (about RMB 53.2 billion) listed on the science and technology innovation board, and Jingdong health Co., Ltd. (about RMB 26.1 billion) listed in Hong Kong.

In the second half of 2020, driven by the implementation of the registration system on the science and technology innovation board and the growth enterprise market, and by the active capital markets in the United States and Hong Kong, the listing momentum of TMT companies in the mainland of China will continue to strengthen. Due to the early listing of fast hand companies in Hongkong, coupled with the steady development of the Kwai Chuang board and the pioneering sector, the outlook for 2021 is expected to be a IPO year for TMT enterprises, which is likely to be high in A shares and overseas markets.

The analysis of major sectors shows that in the second half of 2020, science and technology innovation board has become the main listing choice of mainland TMT enterprises, 34% of the mainland TMT enterprises choose to be listed on science and technology innovation board, a total of 37 enterprises have obtained about 95.7 billion yuan of financing. Another 30 Mainland TMT companies chose to list in Hong Kong and overseas, accounting for 28%, and obtained about 125.9 billion yuan of financing; there were 24 TMT industry IPOs in Shenzhen growth enterprise market, accounting for 22%, and obtained about 18.1 billion yuan of financing; there were 7 main board IPOs, accounting for 6%, and the financing amount was about 3.4 billion yuan; there were 11 SME boards in Shenzhen, accounting for 10%, and the financing amount was about 6.5 billion yuan.

By analyzing the key financial data, we can see that in the second half of 2020, there were 61 IPOs in the technology hardware and equipment industry (including about 11 IPOs in the semiconductor industry), accounting for 56%; 43 IPOs in the software and service industry, accounting for 39%; and 5 IPOs in the media industry, accounting for 5%. As a result, the average income of software and service listed companies is higher.

In addition to the listing policies in Hong Kong and overseas markets allowing enterprises that have not yet made profits to list with losses, the launch of the science and technology innovation board also provides opportunities for enterprises that are still in a state of loss to list. In the second half of 2020, 11 of the 30 TMT companies listed in Hong Kong and overseas are in a state of loss. However, because the profit scale of lufax listed on the New York Stock Exchange is far larger than that of other companies listed in the same period, the average net profit of the companies listed in Hong Kong and overseas is higher. In the second half of 2020, three of the enterprises listed on the science and technology innovation board are in a state of loss. The deregulation of the Listing Rules on the science and technology innovation board creates new opportunities for the loss making enterprises with R & D capabilities.

With the exception of TMT companies listed on the science and technology innovation board, the average p / E ratio of TMT companies listed on A-share market will remain at a high level at the end of 2020, although it will decline compared with the previous period. The average p / E ratio of A-share TMT company increased from 48 times on December 31, 2019 to 57 times on June 30, 2020, and then decreased to 49 times on December 31, 2020.

As of December 31, 2020, 215 enterprises have been listed on the science and technology innovation board. Among them, there are 86 TMT enterprises with an average financing amount of RMB 1.812 billion. On the first day of listing, the average p / E ratio of the 86 TMT companies was 60 times, and the highest one was nearly 355 times.

In the growth enterprise market, since August 24, 2020, the first batch of enterprises registered on the growth enterprise market have been listed on the growth enterprise market, a total of 63 enterprises have been listed on the growth enterprise market, the total amount of financing is 66 billion yuan, the average amount of financing is 1.048 billion yuan, and the average initial P / E ratio is 35 times. Among them, the total financing amount of 17 TMT enterprises is 15.2 billion yuan, the average financing amount is 896 million yuan, and the average initial P / E ratio is 35 times.

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